I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. I have written for The Times, Daily Telegraph, Express, Independent, City AM, Wall Street Journal, Philadelphia Inquirer and online for the ASI, IEA, Social Affairs Unit, Spectator, The Guardian, The Register and Techcentralstation. I've also ghosted pieces for several UK politicians in many of the UK papers, including the Daily Sport.

Wal-Mart Stores Inc, the world’s largest retailer, squelched an internal investigation into allegations of bribery at its Mexican subsidiary instead of broadening the probe, the New York Times reported on Saturday.

The Times said that in September 2005, a senior Wal-Mart lawyer received an e-mail from Sergio Cicero Zapata, a former executive at the company’s largest foreign unit, Wal-Mart de Mexico, describing how the subsidiary had paid bribes to obtain permits to build stores in the country.

Wal-Mart sent investigators to Mexico City and found a paper trail of hundreds of suspect payments totaling more than $24 million, but the company’s leaders then shut down the investigation and notified neither U.S. nor Mexican law enforcement officials, the Times reported.

Felix Salmon follows this up with a look at what this means for Wal-Mart’s banking subsidiary in that country.

David Barstow’s explosive 7,600-word investigation of corruption at Wal-Mart is required reading this weekend. I’m not going to attempt to summarize the whole thing, but basically Eduardo Castro-Wright, currently Wal-Mart’s vice-chairman, oversaw a culture of bribery when he was CEO of Walmex. And when a key player in that bribery scheme blew the whistle, Walmart in Bentonville buried the investigation, and didn’t report anything to the authorities in either Mexico or the US.

All of this looks like a slam-dunk case under Foreign Corrupt Practices Act, and I’m quite sure that multiple extremely senior heads are going to roll in the wake of this NYT exposé. As always in such cases, the crime was bad; the cover-up was worse.

One name, however, is conspicuous by its absence in Barstow’s report: Banco Wal-Mart, the huge bank which is a wholly-owned subsidiary of Walmex. It’s a serious player in the Mexican banking industry — it opened its millionth account over a year ago — and thanks to a quirk of international banking-regulation protocols, it lacks a lot of the regulation that its competitors have.

Yes, I’m aware of the Foreign Corrupt Practices Act and have had to deal with it in my time. I’ve also had to deal with the much more recently introduced Bribery Act in my native UK as well. Just as I’ve dealt with bribery back when it was legal for an Englishman to be so involved. Back when bribes paid were actually tax deductible for an English company. And that again is, to my mind, simply a hard headed admission that other places sometimes do things in ways that we would not tolerate at home.

Mr Deripaska’s admission, made in an exclusive interview with The Sunday Telegraph, casts light on the murky world in which oligarchs operated – and made their fortunes – in post-Soviet Russia. ….. In a candid interview, Mr Deripaska said he paid protection money to criminal gangs. He also built up his own security unit of former KGB agents and Red Army soldiers, as well as paying the local police for protection.

A source close to Mr Deripaska said that he was forced to pay gangs to stop his staff being threatened.

“The payments are called krysha, money paid to protect clients. It literally means roof in Russian. You are paying to protect your roof,” the source said.

Mr Deripaska said: “The first time I was directly threatened … two weeks later my commercial director was shot two times in the head. This was how, finally, I decided it was better to pay for the moment to stay alive and for my people to stay alive.”

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I spent a lot of time in the 1980′s in Mexico on business, and I think everything in Mexico is corrupt. Corruption is the way of life in Mexico. The same is true of some other South American countries.

Excuse me, but your whole point is totally moronic. You’re into making a buck so badly you support criminal activities by doing business in countries where governments allows this stuff to happen? What’s the matter with you! Saying criminal activity is business as usual is taking it in the rear for your business. I think we shut down mobsters for the very same thing. A business climate and a moral one are two different things and it’s clear you don’t care how many fleas you wake up with if the dogs hand you a check. And you don’t want laws to exists that helps stop this activity – hmm, you on the killers’ payroll? Sounds like it.

The problem with the opinion show the lack of morality, integrity and ethics in the corporate and governmental world. I am old school and am appalled by the actions of Wal-Mart and other corporations who give in to bribery. When one person takes a stand, others will follow. Your opinion just adds acceptance. I come from another view point.

Completely agree. If not Wal-Mart Carrefour or Target or another large mega-retailer would have jumped into the market. The NY Times should refocus their ink and reporting elsewhere. This story will not change business practices in Mexico one iota.

Of course you were not working for WMT during the period in question, where the CEO and legal department drummed compliance and put out videos re. honesty. What a joke, I have never seen such hypocrisy.

Castro-Wright via his bribe machine defrauded shareholders in WMT. The growth in Mexico was the basis for shareholder confidence, both individual and institutional. The reasons for not exposing the bribery were purely financial. Let’s see if the “market” punishes WMT in Mexico, I doubt it. What other countries has WMT bribed its way into market dominance? Meanwhile Tom Hyde is just a skiing fool. Ha ha ha.

Corruption in Mexico?? oh thats only from racist America putting down the brown.. whats a little meth or a few bags of pot.. whats wrong with a few people hooked on herion.. gees get over it..its the latino way.. just look how nice mexico and other cesspools south .. just wait until I get that “dream act” so I can bring ALL OF MY FAMILY..and our culture..to your neighborhood..well the neighborhood your holding for us..as soon it will be OUR neighborhood.. why? because Americans are to stupid to stop us..

The best reaction I have seen all day. So what? This should also be the reaction to the Secret Service prostitution scandal and Army troops posing with body parts. We act like we know what war is like, or what it is like to do business in Mexico. I think the media is at fault for making these things “scandals” in the absence of real news, and we are just as bad for watching it. Finally someone with the guts to say, so what ! Thank you.

Fantastically shallow analysis – the FCPA is the law, whatever you think of it, and Walmart clearly engaged in a coverup that reached the highest levels of the corporation. And they clearly violated Mexican law. And tried to scapegoat a former employee.

Is the standard to be flout any law that you disagree with and cover-up with impunity? Is this the best we have to offer the world? Shameful.

I have to go with what kevin said. you’re either trying to get me to finishes reading you’re article and signing up or forbes, or you are a moron. Regardless, I think I will read Forbes a whole lot less now.

I am an exec for an American multinational in Mexico City. I can tell you we have lost business for not accepting paying kickbacks. However, we have maintained our integrity and decided to do business exclusively with customers who buy our products and services exclusively based on merit, in accordance to American, International and Mexican laws. Buying from our company is now viewed by many of our customers as a sign to their superiors and control bodies that they are behaving in ethical ways. Thinking that you cannot behave properly in Mexico is simply not true, it is the easy way out.

And to answer the question of so what? I think this is one of a myriad of examples of corruption that demonstrate the flaw in our corporate structure and governance. If it is beneficial for a Corp to do something, then profit demands that you do it in our society. If it is morally questionable, or even illegal, that is only a consideration as it pertains to profitability. As long as you can increase profits, it doesn’t matter if it’s illegal or immoral.

Your right John, this author’s argument is the easy way out. It’s a great way for people not to feel guilty about the fact that so much of American Corporate Wealth has been gained from breaking the rules of society. We are the “suckers” for playing according to the rules while they cheat them and benefit immensely.

While it may be difficult to comply with the FCPA and the UKBA, this article entirely ignores the cosequences of bribery.

Despotic leaders around the world are empowered by bribery and their regimes are propped up by the power of the corrupt dollar. In the absense of the corrupt dollar, these leaders would be unable to maintain their authority. And when their authority was finally challenged, their transition out of power would be met with significantly less blood shed.

I think it is implausible that the United States would have needed to spend $1 trillion to depose Saddam Hussein, or that nearly 10,000 people would have died tried trying to depose the corrupt government in Syria, or that Iran would would be close to getting “the bomb” if not but for corruption.

Sure that sounds extreme. But i don’t believe it is.

Corruption by its nature is hidden, and while some estimate bribery industry to be worth $1 Trillion annualy, we are often unable to or choose not to make a direct connection between corruption and the empowerment of these despots.

Due to our blissful ignorance and statements like “This is how they do busisness there”; when the information is uncovered, we refuse to ask the right questions.

Take the Arab Spring; When Mubarak was deposed he was worth an estimated $80 Billion. Gaddafi had an estimated $36 billion in US Banks Alone.

Where did this money come from?

Any logical thought process would tell us, it did not come from foreign governments, it did not come from small and medium sized businesses, and it was not taken from the people in these countries who live in abject poverty. It cames from large multi-nationals involved in massive corruption dealings.

Large multinationals MUST not comply with bribery requests. Large multinations must refuse to cooperate in such schemes and if they are unable to do business without enabling oppressive and corrupt governments, they must avoid doing business in such markets.

The consequences to the people, our economy, our country and the advancement of a civilized world cannot be ignored due to our insatiable appetite for “maximizing shareholder value.”

Anti-bribery laws must be strengthened, penalties more severe and enforcement agencies funded and staffed to motivate compliance. Not the other way.

If operating ethically, and reducing empowerment of despots is not sufficient motivation and that maximizing shareholder value is one’s only objective.. Try this. Those who pay or accept a bribe are stealing from shareholders. Corruption is theft.

Well I agree with the report. Along those lines I also believe we should stop wasting time trying to stop drug cartels operating in the US, because drug consumption is normal here in the US. I also believe we should stop wasting resources prosecuting Illinois politicians or Wall Street bankers, because their corrupt behavior is normal. I would hate to think that Mr Worstall has such low standards of integrity, maybe reporters should just start making things up and England should stop wasting time and resources with the Murdoch fiasco.

As Joel Baken and his colleagues point out in The Corporation, if corporations are persons, the kind of person they are is psycopathic.

Read The New York Times’ coverage of Walmart Mexico: if Walmart’s own investigators’ and the Times’ allegations are correct, then one need not look further for affirmation of Baken et al’s conclusion.

Doubtless Walmart will get away with this, just as so much other alleged corporate criminality goes without investigation, prosecution or redress. And doubtless Forbes and other corporate media outlets will wonder incredulously why people want to occupy Wall Street, punish those deemed responsible for the economic and financial meltdown or simply tear down corporate and financial control over our economy and society. And meanwhile, capitalism’s intellectuals and apologists endlessly churn out the embarassing and pathetic nonsense displayed in this article.

To most citizens meanwhile, it seems increasingly obvious that corporate capitalism is not only corrupt and immoral; they see that it is increasingly unable to satisfy even humanity’s most basic human needs and aspirations. Fewer and few prosper, more and more sink into debt, insecurity and poverty. More and more production, more and more waste, pollution and maldistribution of goods and services.

It is increasingly obvious that corporations, rightwing politicians and the corporate media have forgotten Keynes, let alone taken his insigts to heart. That’s unfortunate because he was right: capitalism “is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn’t deliver the goods. In short we dislike it, and we are beginning to despise it. But,” he sighed, “when we wonder what to put in its place, we are extremely perplexed.”

The corporate media will doubtless continue to keep its collective head deep in the sand believing as Keynes feared and Margaret Thatcher hoped, “there is no alternative.”

We can only hope that the young activists of Occupy Wall Steet, the unions and left will continue to wonder aloud: “Isn’t there a better way to order our affairs, live our lives and feed ourselves?” Hopefully they will find an answer to the moral bankruptcy and social psychopathology of corporate capitalism before it is too late.

This is the kind of opinion you might find on the Colbert Report, only as satire. With his cynical and arrogant response to widespread corruption at Wal Mart, Mr. Worstall needs to drop another dollar into the d-bag jar. Wal Mart’s aggressive and proactive use of clearly illegal means to destroy the competition cannot be explained away as something any normally upstanding company would need to do to operate in Mexico. The solution to the problem is not to do away with the FCPA, it’s to more actively police America’s corporations from perpetuating and benefitting from this kind of immoral and unjust activity abroad.

Good to know that Forbes is paying a writer that feels corruption is acceptable. The mere comparison of doing business in Mexico versus Russia is laughable. Bottom line, if this journalist thinks that ignoring US laws and standards of ethics is acceptable, we might want to question where and how he gets the information he reports on.

Just because other countries have a culture of bribery does not mean we have to engage in it and thereby foster and cement it further, enriching criminals to the detriment of everybody else. All in the name of profit and growth. According to the author someone will bribe their way in, thus in his narrow world view the anti-corruption laws are the problem.

I would counter that these laws are a good first step and are meant to break the vicious cycle of crime and corruption by increasing the stakes of non-compliance for MNCs.

Besides, the far worse issue at hand is the cover up going all the way to the top of Walmart. Dare I hope that some high-ranking executives go to jail for this? Nah, who am I kidding!

I strongly disagree with the idea that crimes like bribery and mafia protection should not be regulated, even if they are made outside of the circle of more or less “normal” countries. The idea that unmoral behaviour is acceptable, because it is widely spread somewhere is absurd, because if the representatives of the “normal” parts of the world are not able to set an example what normal should be, than there is no way the locals to even try to change their ways.

So What? So. Because it’s called “monopoly”! A company that becomes a monopoly is everything against freedom, the American way. Wal-Mart is a monopoly! It has taken “away” countless “more” than it has given back. Lower prices? Really how could we know? Walmart moves in selling groceries and puts all others out of business. When the others are gone, and they go for good. Then you forced to “have to shop a monopoly. Walmart has NO competition. None! Walmart then owns the price and how many to sell and to what area to sell it. Walmart then owns you. End of subject. And the government likes that bundled up “control” of the “taxes”.

Mr Worstofall, You Sir, should be investigated yourself if that is truly the way you feel about Walmarts massive bribery corruption and cover-up in Mexico. If you are an ineligent man you don’t even believe the stuff you say yourself. Personally i have traveled all over this planet and have very good friends who own bussineses in foriegn countries. There is no excuse for international bribery and corruption. My very good friend who owns several successful bussineses in Thailand, where bribery and payoffs are probably more common than mexico, told me even before all this walmart bribery stuff came out, that if i come to start a bussines over there, the most important thing he stressed strongly to me was, do not ever get involved in bribery and payoffs no matter what. Not just because its illegal, but because its just bad bussines practice, its wrong and it is very imoral. Bribery and payoffs is how low life, unethical, imoral criminals do bussines. Even if it was true that there is no way to do bussines in any certain country, which is not the case in mexico, without commiting a crime, then the obvious choice of any decent bussines would be to just not do bussines there. If your neighbor has some apples and doesn’t want to give you any, then you don’t get any apples. If you decide you must have some and decide to get them illegally, then you deserve to have him sick his dogs on you. furthermore, the bribery wasn’t all they did. When they were first confronted with the evidence the top officials at home office apparently tried to cover it up, and sent lobbyists to DC to try to change the laws after they already broke them. These are corrupt corporate international criminals. And anyone who doesn’t shun them for this type of practice obviously has a serious problem with thier own values. and doesn’t Mexico have enough crime already, without Walmart coming on the scene and flooding the illegal market with multi millions of dollars which winds up funding who knpws what. If you are not going to do something to help make the world better, then just shut up and do nothing, but do not speak out in support of massive international corruption, bribery and corporate cover-up. Please. Have some respect for yourself.

You Sir, should be investigated yourself if that is truly the way you feel about Walmarts massive bribery corruption and cover-up in Mexico. If you are an ineligent man you don’t even believe the stuff you say yourself. Personally i have traveled all over this planet and have very good friends who own bussineses in foriegn countries. There is no excuse for international bribery and corruption. My very good friend who owns several successful bussineses in Thailand, where bribery and payoffs are probably more common than mexico, told me even before all this walmart bribery stuff came out, that if i come to start a bussines over there, the most important thing he stressed strongly to me was, do not ever get involved in bribery and payoffs no matter what. Not just because its illegal, but because its just bad bussines practice, its wrong and it is very imoral. Bribery and payoffs is how low life, unethical, imoral criminals do bussines. Even if it was true that there is no way to do bussines in any certain country, which is not the case in mexico, without commiting a crime, then the obvious choice of any decent bussines would be to just not do bussines there. If your neighbor has some apples and doesn’t want to give you any, then you don’t get any apples. If you decide you must have some and decide to get them illegally, then you deserve to have him sick his dogs on you. furthermore, the bribery wasn’t all they did. When they were first confronted with the evidence the top officials at home office apparently tried to cover it up, and sent lobbyists to DC to try to change the laws after they already broke them. These are corrupt corporate international criminals. And anyone who doesn’t shun them for this type of practice obviously has a serious problem with thier own values. and doesn’t Mexico have enough crime already, without Walmart coming on the scene and flooding the illegal market with multi millions of dollars which winds up funding who knpws what. If you are not going to do something to help make the world better, then just shut up and do nothing, but do not speak out in support of massive international corruption, bribery and corporate cover-up. Please. Have some respect for yourself.

Wow, You are also completely void of ethics, integrity and moarls also. just like walmart. You can’t be serious. The fact is good, moral,ethical people or businesses do not get involved with corruption, bribery and payoffs. I know, I have close friends who have owned busnisesses in foriegn countries where briberry is common for years. My good friend who owns several succesful busnesses in Thailand told me long before this walmart scandal came out when i asked him about starting a business there. the first most important thing to know is do not get involved in bribery and payoffs. it may be easier and cheaper, but not only is it illegal, its just not proper busnisses, its corruption, its wrong, unethical, and very imoral. you run a proper business,or you don’t run one at all. i can’t believe the brainwashed minds and lost souls of so many people that believe the junk they hear and actually fall for the excuses. The fact is, as i know from knowing friends who run businesses in foriegn countries, that even if it were true that you had to pay bribes, and commit crime and corruption just to do business in Mexico,even a moderately moral businessman would simply just not do business there. Hey, if you want some of your nieghbors apples, and they don’t want to give them to you. you don’t get any apples then’ right?. And if you make the imoral decision to do something not only just unethical and wrong, but illegal to get them, them you deserve it when his big hungry dog chews on your ass. I know Walmart all too well after working there for 10-years and dealing with there home office execs at times. Walmart is totally and completely void of all moral conscience, ethics and integrity. This is not even an exaggeration. Believe me. You don’t even know the first thing about how deeply depraved this company is. You would swear its being run by Satan himself if you knew what i know about Walmart., and i’m sure its worse than i even know. Some things i can’t even say here. I have a response from a letter i wrote to CEO Mike Duke himself, after i got fired from my job of 10-years at the Exton, Pa. walmart for reporting a managers abuse of employees including a mentally handicapped female which other employees were afraid to report. It’s a threat from their legal dept. and an order to never speak with any walmart employee. Its all documented. the NLRB even filed a charge on Walmart for it, and that is just the outter fringes of what i have personally seen and have knowledge and documentation of that goes on at Walmart with amazingly total absence of anything like moral conscience or discernment at all. I never knew anyone in my life, and i known some bad people, who could do the most wicked evil things to people, without even flinching for a second the way walmart does with no sign of conscience whatsoever. its truly remarkable. Robert Snodgrass, 715 Taylor rd., Downingtown, Pa. 19335 snod307@hotmail.com 484-252-9596

It’s like reading an analysis made by a 14 year-old that isn’t able to see the consequences of such acts. I’m from Mexico, and there are 100% legal ways to establish a business. The thing is Walmart wanted to skip those legal steps, take the quick and easy way. There’s no such thing as “it is done different there”, yes we have different laws but what they did was outside de Mexican law too. If the “things are different” is being applied then I can assume Walmart pays the drug cartels for the stores that are in the northern states (which is common) so besides jumping above Mexican law they are giving money to the drug cartels, “yay”. There isn’t a “different” way there is the lawful way and the corrupt way. They chose the easy path.

Nothing like a great insider’s account to understand how multinationals pay bribes.

One of the best accounts I have read of how US multinationals pay bribes in developing countries, and which I cannot recommend enough, is”High-Tech Planet: Secrets of an IT Road Warrior” written by a former Oracle executive who saw it all.

It is a funny, brilliant and insightful account of the mechanics used by some US multinationals in bribing government officials in the Third World. The FBI and SEC obviously read the book because following its publications they decided to investigate Oracle for bribes exactly as they were described in the book. What Walmart is doing is just the same.